Pawn shops are a popular option for those in need of quick cash. They offer a way to borrow money by using personal items as collateral. However, what happens to your items at a pawn shop if you don’t redeem them?
Here are some things you should know:
- Defaulting on a Pawn Loan: If you are unable to repay the pawn loan on time, the pawn shop will keep the item that was used as collateral. This is known as defaulting on the loan.
- Grace Period: Most pawn shops offer a grace period after the loan term has expired. During this time, you can still redeem your item by paying the loan amount plus any interest and fees that have accrued.
- Auction: If you do not redeem your item during the grace period, the pawn shop will assume ownership of the item and can legally sell it to recoup the loan amount. They may sell the item in their store or at an auction.
- Fair Market Value: The pawn shop will sell the item at fair market value, which is typically lower than the retail price. This is because they need to make a profit to cover their costs and make a profit.
- Unsold Items: If the item does not sell at auction, the pawn shop may hold onto it and attempt to sell it again in the future. Alternatively, they may sell it to a wholesaler or another buyer.
If you default on a pawn loan and do not redeem your item during the grace period, the pawn shop will assume ownership of the item and can sell it to recoup the loan amount.
They will sell the item at fair market value and may hold onto it or sell it to a wholesaler if it does not sell at auction. If you are considering using a pawn shop, it’s important to understand the terms of the loan and ensure that you are able to repay it on time to avoid losing your item.
If you are looking to pawn any items in Largo, Seminole, Clearwater or any nearby area in Pinellas County, call us today at (727) 239-7250 or just stop by, we are open until 6:00.